Major transaction - land resumption

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Shui On Land Limited

瑞 安 房 地 產 有 限 公 司*

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 272)

MAJOR TRANSACTION

LAND RESUMPTION

LAND RESUMPTION

On 9 July 2021, (a) Fo Shan Rui Fang, a wholly-owned subsidiary of the Company, entered into the Land Resumption Agreement No.7 with Foshan Chancheng District Land Reserve Center and Foshan Chancheng District Zumiao Sub-district Office, pursuant to which Fo Shan Rui Fang has agreed to surrender Land No.7 to Foshan Chancheng District Land Reserve Center at a consideration by way of cash compensation of RMB1,111,226,308.10 (equivalent to approximately HK$1,332,789,000.00); and (b) Fo Shan Rui Kang Tian Di, a wholly-owned subsidiary of the Company, entered into the Land Resumption Agreement No.8 with Foshan Chancheng District Land Reserve Center and Foshan Chancheng District Zumiao Sub-district Office, pursuant to which Fo Shan Rui Kang Tian Di has agreed to surrender Land No.8 to Foshan Chancheng District Land Reserve Center at a consideration by way of cash compensation of RMB1,541,881,015.68 (equivalent to approximately HK$1,849,310,000.00).

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio in respect of the Transaction exceeds 25% but is less than 75%, the Transaction constitutes a major transaction of the Company under Chapter 14 of the Listing Rules, and is subject to the reporting, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules.

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To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder is required to abstain from voting under the Listing Rules if the Company were to convene an extraordinary general meeting for the approval of the Transaction.

At the date of this announcement, Shui On Properties Limited, Shui On Investment Company Limited and New Rainbow Investments Limited, which are controlled by Shui On Company Limited and together constitute a closely allied group of Shareholders, hold 1,725,493,996 Shares, 2,733,949,818 Shares and 29,847,937 Shares respectively, and together represent approximately 55.68% of the issued share capital of the Company at the date of this announcement. The Company has obtained the written approval of Shui On Properties Limited, Shui On Investment Company Limited and New Rainbow Investments Limited on the Land Resumption Agreements and the Transaction pursuant to Rule 14.44 of the Listing Rules. As a result, no extraordinary general meeting will be convened to consider the Transaction.

A circular containing, among other things, further details of the Transaction is expected to be dispatched to the Shareholders within fifteen (15) business days after the publication of this announcement, i.e., on or before 30 July 2021.

Shareholders and potential investors of the Company should note that the Land Resumption Agreements and the Transaction are subject to a number of conditions which are detailed in this announcement. Depending on the re-designation of the land use of the Resumed Land, if the Group shall participate and win in the Auction, the consideration to be paid may be more or may be less than the sum of the Land No.7 Compensation and the Land No.8 Compensation. Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

RESUMPTION OF LAND NO.7

On 9 July 2021, Fo Shan Rui Fang, a wholly-owned subsidiary of the Company, entered into the Land Resumption Agreement No.7 with Foshan Chancheng District Land Reserve Center and Foshan Chancheng District Zumiao Sub-district Office, pursuant to which Fo Shan Rui Fang has agreed to surrender Land No.7 to Foshan Chancheng District Land Reserve Center at a consideration by way of cash compensation of RMB1,111,226,308.10 (equivalent to approximately HK$1,332,789,000.00).

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LAND RESUMPTION AGREEMENT NO.7

The principal terms of the Land Resumption Agreement No.7 are summarised as follows:

Date

9 July 2021

Parties

1. Fo Shan Rui Fang;
2. Foshan Chancheng District Land Reserve Center; and
3. Foshan Chancheng District Zumiao Sub-district Office

Compensation and payment terms

The cash compensation for Land No.7 ("Land No.7 Compensation") is RMB1,111,226,308.10 (equivalent to approximately HK$1,332,789,000.00), which will be payable by Foshan Chancheng District Land Reserve Center to Fo Shan Rui Fang after a new owner has purchased Land No.7. Payment of the Land No.7 Compensation is subject to completion of the acquisition of Land No.7 by the new owner. Such new owner will pay the consideration of Land No.7 in tranches in accordance with the terms of the sale and purchase agreement to be entered into between the new owner and the Foshan government and such consideration will be used to settle the Land No.7 Compensation. Within sixty (60) days after the new owner has paid a tranche of the consideration, Foshan Chancheng District Land Reserve Center shall pay Fo Shan Rui Fang such amount in accordance with the below formula:

The Land No.7 Compensation was determined after arm's length negotiations between Fo Shan Rui Fang and Foshan Chancheng District Land Reserve Center with reference to (1) the laws, regulations and procedures applicable to resumption of state-owned land in Chancheng District, Foshan, the PRC; (2) an agreed valuation for Land No.7 in respect of which a valuation report will be included in the circular to be issued by the Company regarding the Transaction; and (3) the amount of the investment expended by the Group in Land No.7 prior to the date of the Land Resumption Agreement No.7 as audited by an independent auditor jointly appointed

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by Fo Shan Rui Fang, Chancheng Branch of Foshan Bureau of Natural Resources* (佛山市自然資源局禪城分局), Foshan Chancheng District Finance Bureau* (佛山市 禪城區財政局) and State-owned Assets Supervision and Administration Commission of Foshan Chancheng District* (佛山市禪城區國有資產監督管理局).

Conditions

Subject to the terms of the Land Resumption Agreement No.7, the Land Resumption Agreement No.7 shall only be effective upon approval by the Shareholders in accordance with the requirements of the Listing Rules, and the Land Resumption Agreement No.8 having taken effect.

Delivery of Land No.7

Within ninety (90) days after Fo Shan Rui Fong receives the written request from Foshan Chancheng District Land Reserve Center, Fo Shan Rui Fang shall deliver Land No.7 to Foshan Chancheng District Land Reserve Center on an "as-is" basis, and thereafter Foshan Chancheng District Zumiao Sub-district Office shall be responsible for the daily management of Land No.7 until the sale of Land No.7 to a new owner is completed.

After the Land Resumption Agreement No.7 takes effect and within thirty (30) days after Fo Shan Rui Fong receives the written request from Foshan Chancheng District Land Reserve Center, Fo Shan Rui Fang shall file for the cancellation of the registration of its ownership right of Land No.7.

Information of Land No.7

Land No.7 comprises one parcel of land with an aggregate site area of approximately 8,109.35 sq. m. situated at the eastern side of Jian She Street* (建設街東側), Chancheng District, Foshan, the PRC, and has been approved for office and retail use. At the date of this announcement, Land No.7 remains undeveloped.

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Net profit/(loss) before/after tax

The table below sets forth the net loss (both before and after tax) attributable to Land No.7 for the years ended 31 December 2019 and 2020:

RESUMPTION OF LAND NO.8

On 9 July 2021, Fo Shan Rui Kang Tian Di, a wholly-owned subsidiary of the Company, entered into the Land Resumption Agreement No.8 with Foshan Chancheng District Land Reserve Center and Foshan Chancheng District Zumiao Sub-district Office, pursuant to which Fo Shan Rui Kang Tian Di has agreed to surrender Land No.8 to Foshan Chancheng District Land Reserve Center at a consideration by way of cash compensation of RMB1,541,881,015.68 (equivalent to approximately HK$1,849,310,000.00).

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